Hot debate on ideal number of TV stations

HONG KONG - The question of how many television stations Hong Kong can support has been hotly debated in the city.

With the new entrants, the city of 7.2 million will have four free-to-air TV stations. By contrast, Singapore with 5.3 million people has only MediaCorp.

A second station, SPH MediaWorks, shut in 2004, four years after it entered the market. Government leaders including Mr Lee Kuan Yew had expressed doubts on the viability of two TV companies in a small market like Singapore.

In Hong Kong, the debate is over the government's decision not to grant a licence to Hong Kong Television, saying it wants a "gradual and orderly approach" in liberalising the industry.

A consultancy which did a feasibility study for the government told The Straits Times that TV ad revenue has grown at a low but steady pace of 2 per cent annually.

Last year, advertisers spent an estimated HK$13 billion (S$2.1 billion) - a third of this on television. Of this, 80 per cent went to public-listed TVB which earned a tidy profit of HK$1.736 billion last year after operating costs of about HK$3.7 billion.

Value Partners senior manager Taylor Lam said: "It's not an exciting growth market, but that does not mean there is no room for new players."

Most advertisers target middle-aged and old women, the bulk of TV viewers, he said.

"If new players can attract new niche audiences, for example the younger generation, the advertising revenue pie can get bigger."

The statutory Communications Authority and many industry players want licences issued to all applicants, so the market can decide who survives.